Best Buy 2006 Annual Report Download - page 94

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$ in millions, except per share amounts
80
we have not recorded any income tax expense as a result of
the Act’s provisions.
We have not provided deferred taxes on unremitted foreign
earnings because such earnings are considered to be
indefinitely reinvested outside the U.S. Such amounts were
not significant.
Deferredtaxes are the result of differences betweenthe
bases of assets and liabilities for financial reporting and
income tax purposes. Deferred tax assets andliabilities as
of the dates indicated were comprisedof the following:
Feb. 25,
2006
Feb. 26,
2005
Accrued property expenses $87 $ 74
Other accrued expenses 44 24
Deferred revenue 139 48
Compensation and benefits 47 51
Stock-based compensation45 —
Inventory 2 21
Net operating loss carryforwards 57 47
Goodwill 17 19
Other 36 25
Total deferred tax assets 474 309
Property and equipment (146) (158)
Convertible debt (36) (27)
Other (24) (5)
Total deferredtax liabilities (206) (190)
Net deferred tax assets $268 $ 119
Deferred taxassets and liabilitiesincluded in our
consolidated balance sheets were as follows:
Feb. 25,
2006
Feb. 26,
2005
Other current assets $126 $ 80
Other assets 142 39
Net deferred tax assets $268 $ 1 19
Management believes that the realization of the deferred tax
assets is more likely than not, based upon the expectation
that we will generate the necessary taxable income in future
periods and, accordingly, no valuation reserveshave been
provided. At February 25, 2006, we had net operatingloss
carryforwards from our International operations of $164,
which expire beginning in fiscal 2007 through 2016. We
expect to fully utilize the net operating loss carryforwards
and, therefore, no valuation allowances have been
recorded.
10. Segments
We operate two reportable segments: Domestic and
International. The Domestic segment is comprisedof U.S.
Best Buy, Magnolia Audio Video and U.S. Geek Squad
operations. The International segment is comprised of
Future Shop, Best Buy and Geek Squad operations in
Canada. Our segments are evaluated on an operating
income basis, and a stand-alone tax provision is not
calculated for each segment. The other accountingpolicies
of the segments are the same as those described in Note 1,
Summary of Significant Accounting Policies.